Concurrences Revue des droits de la concurrence Th he E EU U C - PDF document

Concurrences Revue des droits de la concurrence Th he E EU U C Comm mi is ss si io on’s s G Gu ui id da an nc ce e o on n e ex xc cl lu us si io on na ar ry y a ab bu us se es s: : A A s st te ep p f forw wa ar rd d or r a a m mis ss se ed d o op pp po or rt tu un ni it ty? ? Tr re en nd ds s R Concurrences N° 2-2009 – pp. 9-39 Fr ra an nc ce es sc co o R R O OS SA AT TI I Economist, Partner, Brussels F Fl lo or re en nc ce e N N I IN NA AN NE E Competition Law Partner, Paris Bar H Hen nd dr ri ik k B B O OU UR RG GE EO OI IS S Senior Counsel Competition, Regulation and Government Relations, General Electric Group, Brussels N Nia am mh h M M C C C C A AR RT TH HY Y Competition & Regulatory Lawyer, British Airways, London J Jo oh ha an nn ne e P P E EY YR RE E Head of Antitrust Europe, Michelin Group, Clermont-Ferrand J Ja am me es s K K I IL LL LI IC CK K Competition Law Partner, Brussels A As ss si im ma ak ki is s P P. . K K O OM MN NI IN NO OS S Senior associate, Brussels Visiting lecturer, IREA, Université P. Cézanne Aix-Marseille III, University College London G Ge eo of ff fr re ey y D D. . O O L LI IV VE ER R Partner, Washington D.C. P Ph hi il li ip pp pe e C C H HO ON NÉ É Chief economist, Autorité de la concurrence, Paris Io I oa an nn ni is s L L I IA AN NO OS S Faculty of Laws, University College London Emile Noel Fellow, New York University

The EU Commission’s Guidance on exclusionary abuses: A step forward or a missed opportunity? A A U U. .S S. . P PE ER RS SP PE EC CT TI IV VE E G Geo of ff fr re ey y D D. . O O L R * LI IV VE ER Competition Law Partner, Washington D.C. 1. The European Commission is to be commended for issuing its process and an assessment of the competitive constraints on an recently released Communication, “Guidance on the undertaking cannot be based solely on the existing market situation. ” 56 These are all welcome indications that the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant Commission intends to apply Article 82 so as to protect undertakings”, and more generally for its efforts to provide competition as a whole in a dynamic, evolving economy, and guidance to the business community with respect to its not simply to protect individual companies injured by more enforcement objectives. From a U.S. perspective, however, the innovative, efficient or aggressive competitors. Commission’s Communication is disappointing on a number of levels, as it demonstrates a preoccupation with unilateral conduct 3 3. . This impression of convergence may be misleading, that is likely to have procompetitive benefits, fails to provide however. When analyzed more closely, a number of details meaningful safe harbors for businesses, and ignores the reveal that, in important ways, EU competition law applicable difficulties inherent in crafting appropriate remedies in such cases. to unilateral conduct, at least as the Commission proposes to apply it, continues to differ from U.S. antitrust law in certain fundamental ways. Unfortunately for businesses, these I. O Ov ve er rv vi ie ew w differences translate into an increased risk of enforcement with respect to practices that may have procompetitive benefits and 2. . On its surface, the Commission’s recently released greater uncertainty as to the conduct that a dominant firm may Communication, “Guidance on the Commission’s pursue. This is most evident in the Communication’s selection Enforcement Priorities in Applying Article 82 of the EC Treaty of types of conduct for consideration, its unduly confident to Abusive Exclusionary Conduct by Dominant Undertakings,” treatment of complex subjects as to which there (rightly) appears to demonstrate the degree of convergence that has remains a great deal of uncertainty, the lack of emphasis on occurred between EU competition law and U.S. antitrust law clear rules or safe harbors, and the absence of consideration in recent years. The main themes of the Commission’s with respect to remedy. Communication echo principles basic to U.S. antitrust enforcement. The Commission’s statements that its emphasis will be on “ safeguarding the competitive process ” in the II I. . S Se el le ec ct ti io on n o of f t ty yp pe es s o of f c co on nd du uc ct t internal market and that the goal is “ to protect an effective competitive process and not simply [to protect] competitors ” 52 f fo or r d di is sc cu us ss si io on n are familiar refrains to the ears of U.S. practitioners. The test of ensuring that companies holding a dominant position do not exclude competitors “ by other means than competing on the 4. . From a U.S. perspective, the Commission’s selection of merits ” of the products or services they provide 53 is consistent specific types of conduct for detailed analysis in its with language found in at least some U.S. court decisions. 54 Communication is disappointing. In the United States, the clear trend in recent decades has been towards narrowing This test implies that the Commission recognizes the substantially the likelihood of liability for unilateral conduct that distinction between lawful “exclusion” of competitors by might plausibly have procompetitive justifications. Two recent offering superior products at lower prices and unlawful Supreme Court decisions have continued this trend, limiting exclusion by conduct of a type that is unlikely to benefit consumers. 55 Similarly, most U.S. practitioners are severely the circumstances in which a monopolist might be found liable for a refusal to deal 57 or a price squeeze. 58 comfortable with the concept that “ [c]ompetition is a dynamic In contrast, it is no coincidence that two of the small number of cases finding a monopolist liable for unilateral conduct in the past decade involved, at least in part, deliberate deception – * Before returning to private practice in November 2007, Mr. Oliver was the Assistant Director responsible for the Anticompetitive Practices Division at conduct with respect to which there is rarely a legitimate the U.S. Federal Trade Commission. 52 Communication from the Commission, “Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive 55 See United States v. Grinnell Corp ., 384 U.S. 563, 570-71 (1966) (distin- exclusionary conduct by dominant undertakings”, C(2009) 864 final, avail- guishing unlawful monopolization from lawful acquisition of monopoly able at http://ec.europa.eu/competition/antitrust/art82/guidance_en.pdf (here- power “as a consequence of a superior product, business acumen, or histori- inafter, “Communication”), ¶ 6. cal accident”). 53 Id . 56 Communication ¶ 16. 54 See, e.g., Aspen Skiing Co. v. Aspen Highlands Skiing Corp ., 472 U.S. 585, 57 V erizon Communications Inc. v. Law Offices of Curtis V . Trinko , LLP, 540 605 n.32 (1985) (exclusionary conduct encompasses behavior that “either U.S. 398 (2004). does not further competition on the merits or does so in an unnecessarily restrictive way.”) (quoting 3 Phillip Areeda & Donald F. Turner, Antitrust Law 58 Pacific Bell Telephone Co. v. linkLine Communications, Inc ., 555 U.S. ___, ¶ 626b at 78 (1978)). slip op. (February 25, 2009). Concurrences N° 2-2009 l Trends l The EU Commission’s Guidance on exclusionary abuses... 27